Merkel, May draw Brexit battle lines

Britain's Prime Minister Theresa May accused the 27 other EU member states of lining up against Britain

Prime Minister Theresa May on Thursday accused the other 27 EU countries of lining up to oppose Britain over Brexit after Germany's Angela Merkel said the UK should have no "illusions" over the exit process.

EU nation leaders have stressed a united stance as they plan to meet Saturday to set down the bloc's "red lines" -- although the talks will not begin until June, after a snap British election called by May to strengthen her negotiating hand.

Speaking to parliament ahead of the key summit, the German chancellor stressed that "a third-party state will not have the same rights or even superior rights to a member state".

"This may sound self-evident, but I have to say this clearly because some in Britain seem to have illusions on this point," she said. "That would be a waste of time."

Later in the day, May accused the 27 other EU member states of joining forces against Britain.

"We can see how tough those negotiations are going to be at times," May told a campaign rally in Leeds, northern England.

"Our opponents are already seeking to disrupt those negotiations ?- at the same time as 27 other European countries line up to oppose us.

"That approach can only mean one thing -? uncertainty and instability, bringing grave risk to our growing economy with higher taxes, fewer jobs, more waste and more debt."

The British leader is hoping to shore up her mandate in the June 8 ballot ahead of two years of gruelling negotiations.

"The negotiations will be very demanding, without a doubt," said Merkel, the leader of the biggest EU economy.

- Finance question -

The EU has toughened its strategy, making new demands over financial services, immigration and the bills Britain must settle before ending its 44-year-old membership of the bloc.

Britain could be required to give EU citizens permanent residency after living there for five years, in a challenge for May's Conservative government, which has vowed to limit immigration.

The EU's latest draft negotiating guidelines, agreed on Monday, seek to ensure Britain does not get a better deal outside the bloc than inside.

According to the document seen by AFP, the other EU countries will seek to hold Britain liable for the bloc's costs for at least a year after it leaves in 2019 -- longer than was previously proposed.

Merkel said that talks from the very start must include Britain's financial obligations, including after Brexit.

She said these issues must be resolved first in a "satisfactory" way before negotiations turn to Britain's future relations with the bloc -- a sequence Merkel called "irreversible".

"Without progress on the many open questions regarding the exit, including the financial questions, it doesn't make sense to hold parallel talks on the details of a future relationship," she said.

- 'Spirit of unity' -

May started the Article 50 process of leaving the EU last month. Polls suggest her Conservatives will return to power in June with an increased majority.

A new survey, by YouGov for The Times newspaper, meanwhile for the first time signalled more people now believe the Brexit vote was a mistake.

May hosted a working dinner on Wednesday with key EU Brexit negotiators, including European Commission President Jean-Claude Juncker.

EU ministers met in Luxembourg on Thursday to prepare the ground work for Saturday's meeting.

"It seems that at the moment we are completely united on everything," said Maltese Vice Premier Louis Grech, whose country holds the rotating presidency of the EU.

"Naturally we have to protect the EU's interests."

He said a prime objective was "to ensure that we will conduct the negotiations in a spirit of unity and trust between the 27".

May has committed to pulling Britain out of Europe's single market and end free movement of EU citizens into Britain.

Earlier this week, a German senior finance official rejected this demand, in an interview with AFP.

"What won't work is having access to the internal market without freedom of movement" for EU citizens, said Jens Spahn, state secretary at the finance ministry.

"Or access for UK financial institutions to the European financial market if at the same time there is rampant deregulation in London.

"You can have either one thing, or the other. These things must be clarified."